NAVA Reports Fourth Quarter Variable Annuity Industry Data
Reston, VA, March 18, 2009 – NAVA, the Association for Insured Retirement Solutions, announced today fourth quarter results for the variable annuity industry. The combined net assets of U.S. variable annuities decreased 13% to $1.1 trillion, as compared to the end of the third quarter of 2008. Net assets decreased by 24.1% relative to the fourth quarter one year ago.
Variable Annuity total sales, also known as premium flows, for the fourth quarter were $33.3 billion, a 30.3% decrease from fourth quarter, 2007. Fourth quarter net sales of $3.4 billion shows a decrease of 61.5 % from the fourth quarter 2007 net flows of $8.9 billion. The mix in premiums for the fourth quarter showed 67.4% of the total sales were in qualified plans and 32.6% in non-qualified plans.
Total sales for 2008 were $154.8 billion, a 15.1% decrease from the prior year’s 12- month sales of $182.2 billion. Net sales for 2008 were $23.1 billion, or 14.9% of total sales. This reflects a 30.8% decrease in net sales as compared with last year.
The mix of net assets by asset class showed that $504 billion, or 45 % of assets, was held in equity accounts at the end of last year. This is a decrease of 43% as compared with 2007 when $889 billion, or 60% of assets, was held in equity accounts. The mix also shows that $292 billion, or 26% of assets, was held in fixed accounts, which is an increase of 14% as compared to 2007.
About Annuities – With the demographic trend of people living longer, the decline in traditional sources of retirement income (pensions and Social Security), and the responsibility of retirement funding shifting to the individual – an annuity is a critical component of a retirement plan. It is a long-term retirement investment vehicle offering a combination of insurance benefits, guaranteed lifetime income payments and tax-deferred savings. Variable annuities allow individuals to invest in a variety of underlying fixed and equity funds, and provide returns based on the performance of these funds. Only annuities protect retirement assets against market volatility and guarantee retirement income that cannot be outlived.
About NAVA - NAVA, Inc., the Association for Insured Retirement Solutions, is a nonprofit trade association located in suburban Washington D.C. NAVA provides a variety of services to the industry including educational forums, research, and conferences aimed at furthering the development and understanding of fixed and variable annuities, income annuities and variable life insurance. For more information on NAVA visit www.navanet.org
For further information contact:
Kathleen Driscoll McKee, NAVA, (703) 707-8830 ext. 17 or [email protected]
Elizabeth Walker, IMRE, (856) 988-0170 or
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